A Case Study Of Narayan Hrudayalaya's IPO

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Narayan Hrudayalaya has entered the capital market with its IPO on 17th December, 2015 offering shares at a price band of Rs.245 to Rs.250 per share. The IPO would be offer for sale that means the shares offered under IPO would be offered by existing shareholders and no new shares will be floated in the market. Axis Capital Ltd, IDFC Securities and Jefferies lead managed the share sale.
Through the IPO, Narayan Hrudayalaya offered 245 lakh shares for sale by promoters and other shareholders to public. Among the promoters group, Dr. Devi Prasad Shetty and Shakuntala Shetty offered 20.40 lakhs shares each. The biggest block of 122.6 lakh shares was offered by JP Morgan, after which its holding will reduce to 4.67% from
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 Narayan Hrudayalaya profit after tax was also fluctuating, in the financial years 2012 and 2014, the PAT grew at a rate of 66.55% and 95.23% respectively, but in the years 2013 and 2015, the company showed a negative growth rate in PAT by 36.33% and 19.77% respectively.
 The current ratio has been showing a declining trend over the years from 2011 to 2014, however in the year 2015, it has increased slightly.
 Quick ratio on the other hand is has been showing a fluctuating trend, this indicates that liquidity position is not that satisfactory.
 Net profit ratio has also been showing a fluctuating trend, it was very high in the year 2012 and is low in the year
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The raw returns for different time gaps considered is calculated by taking closing prices of the given stock after the specified time gap (i.e., listing day, one month, three months and five months) from the offer price. This return on IPO has been computed as the difference between the closing price on the specified date and the offer price, divided by the offer price. The scrip has given positive returns to its investors since its listing day, the returns are showing a declining trend and this can be attributed to the fact that the market itself was falling down during that period. When the return estimated using the above equation has been adjusted using the returns on the CNX S&P Nifty Index for the corresponding period, it can be seen that the scrip has performed much better than the market since the market adjusted returns have increased compared to the raw returns. This shows that the scrip as such has been performing well in the

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